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Question
Which of the following statements concerning a 30 year, $150,000 loan at 7% with monthly payments is true, if 15 years later, an investor wants to purchase the loan and market interest rates are 5%?
A) The market value of the loan is higher than the book value of the loan because the market rate of interest is lower than the interest rate on the loan
B) The market value of the loan is lower than the book value of the loan because the market rate of interest is lower than the interest rate on the loan
C) The market value of the loan is higher than the book value of the loan because the market rate of interest is higher than the interest rate on the loan
D) The market value of the loan is lower than the book value of the loan because the market rate of interest is higher than the interest rate on the loan
Answer
This answer is hidden. It contains 19 characters.
Related questions
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Using only the information in the table below, what would the IRR be for an investment that cost $500 in period 0 and was sold for $750 in period 5?
Present Value Factor for Reversion of $1 Period
6%
7%
8%
9%
10% 1
.943396
.934579
.925926
.917431
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.889996
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.564474 A) Between 6% and 7%
B) Between 7% and 8%
C) Between 8% and 9%
D) Between 9% and 10%
Q:
The future value compound factor given for period (n) at 15%:
A) Would be less than the factor for period (n + 1) at 15%
B) Would be greater than the factor given for period (n + 1) at 15%
C) Would be the same as the factor given for period (n + 1) at 15%
D) Bears no relationship to the factor for period (n + 1) at 15%
Q:
Your friend has a trust fund that will pay him $100,000 at the end of 10 years. Your friend, however, wants his money today. He promises to sign his trust fund over to you if you give him some money today. You require a 20% interest rate on money you lend to friends. How much would you be willing to lend under these terms?
A) $16,151
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C) $80,000
D) $0it would be impossible to earn 20% interest on the loan.
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The term to describe a piece of tangible personal property that is affixed to a property, such that it may be considered part of the property?
A) Cramdown
B) Workout
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A transaction in which a borrower sells a property for less than the current balance of the loan and then provides all of the proceeds to the sale to the lender, typically in full satisfaction of the loan.
A) Prepackaged bankruptcy
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Second mortgage, B: $40,000
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C) $77,900
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C) Increasing the release price usually lowers the lender's risk
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Q:
Which of the following might impact the density of housing in a land development project?
A) The price paid for the land by the developer
B) The terrain of the land
C) The target market's preferences regarding density
D) All of the above
Q:
The land development industry is best characterized by which of the following statements?
A) The land development industry is dominated by relatively few national competitors
B) The land development industry is highly fragmented, localized, and extremely competitive
C) Land development and project development are synonymous
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Q:
Consider the feasibility study shown in the table. What is the return on total cost for the proposed project? Total sales revenue
$
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$
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$
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B) Effective gross income
C) Net operating income
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Financing costs are usually paid by the lender to either the borrower/buyer or the seller.
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General industry standards for a conventional loan specify a maximum LTV of 60 percent.